The Rising Cost of College
The cost of attending public four-year institutions has grown at a rate of 6.5 percent per year from 2001 through 2010. The trend is similar across all sectors of post-secondary institutions. If this trend continues, the cost of a public education in 2016 will be well over twice the 2001 cost. Even though the law mandates a maximum on grant and loan amounts per student, the increased cost of higher education increases the need for FSA to ensure that eligible borrowers are aware of federal student aid options and are able to finance their education.
The rising cost of college may make it increasingly difficult for students to access and complete their post-secondary education. In an effort to offer prospective students and parents accurate and accessible data on college, the FSA now provides post-secondary institutional information about tuition, fees, and net prices (the price of attendance after applying grand and scholarship aid). All information can be accessed through the College Affordability and Transparency Center at http://collegecost.ed.gov/. The Center includes information for students, parents, and policy makers about institutional costs at America’s colleges and universities. Institutions are listed by the highest and lowest costs of tuition, required fees, and net prices. Lists of institutions that had the highest increase in tuition, required fees, and net prices are also provided. These lists meet requirements outlined in the Higher Education Opportunity Act (HEOA) and will be updated annually by July 1.
As the cost of attendance goes up, the average indebtedness of today’s students is increasing. The risk of taking on more debt is even greater to those borrowers who leave school before obtaining a degree or certificate because they are still responsible for repaying any loans received, despite not receiving a degree or certificate. To help borrowers better manage their debt after graduation, federal loan programs offer loan repayment plans designed to meet the specific needs of borrowers. The federal loan programs allow a borrower to choose his or her repayment plan and to switch plans if the borrower’s financial situation changes. An important new option is the income-based repayment (IBR) plan. This plan gives borrowers the flexibility to meet their federal student loan obligations without causing undue financial hardship. Each year, a borrower’s adjusted gross income, family size, and the total amount of his or her federal student loans. The maximum repayment period is 25 years and if the loan(s) are not fully repaid within 25 years the unpaid portion will be discharged.
Categories: College, General